Wednesday, January 09, 2008

Property Perfect may build mall

REAL ESTATE

Property Perfect may build mall

KANANA KATHARANGSIPORN

The listed developer Property Perfect Plc (PF) plans to develop a shopping centre and a high-rise office building on a 10-rai site on Ratchadaphisek Road before selling it to a property fund, says Teerachon Manomaiphibul, the company's chief operating officer.

He said the plot, which the company will lease for 30 years from a landlord, is in a very prime location on Ratchadaphisek Road in front of the Thailand Cultural Center and adjacent to Robinson Ratchada.

''Open malls have high potential and on Ratchadaphisek Road, there will be a lot of new condominium projects for the young generation who love to spend on a new lifestyle in a neighbourhood mall,'' said Mr Teerachon.

The area is already home to Esplanade, an open mall near the area, and Cyber World Tower owned by T.C.C. Capital Land. PF does not consider those buildings as competition, but rather hopes the many shopping centres will draw visitors to the area.

On Dec 25, PF set up a new subsidiary called Centrepoint Shopping Mall Co Ltd to operate a shopping centre business. With registered capital of one million baht, the subsidiary is 60% held by PF and 40% by overseas investment group Timberline Investments Pte.

In addition, a Singapore-based partner with retail experience will also join the new venture. The development plan will take about three years to complete, while return on equity is expected at 15% annually.

''We will set up a property fund and sell the shopping centre and other retail properties owned or developed by our subsidiaries to the fund with a size of up to five billion baht,'' he said.

Mr Teerachon said the move presented PF with a new business challenge. It entered the condominium segment in 2005, townhouses in 2006, customised and duplex houses in 2007 and now the shopping centre business.

''We should have our own office building as well,'' he adds. Currently, PF and its subsidiaries have offices in the Vongvanij and Vorasombat buildings on Rama IX Road with six floors. All of them will move to a new office building developed under the same shopping centre project.

The property fund is not a new idea for PF. Last year, it sold 60 single detached houses in Perfect Place Suvarnabhumi-Ramkhamhaeng and Perfect Masterpiece Ekamai-Ram Intra worth 520 million baht to a property fund that will launch in the first quarter of this year.

Mr Teerachon said PF hopes to set up two to three property funds worth about 1.5 billion baht in the future. By the end of 2007, PF expected to have presales of about 6.5 billion baht and six billion baht in revenue realisation. In 2008, it targets to achieve 8-9 billion baht in presales and 7-8 billion baht in revenue.

PF plans to re-brand with an investment of about 100 million baht from 2008-2010. The plans will include internal and external activities and a focus on the environment and energy-saving.

It will also have more alliances with partners, including Cementhai Home Mart, to provide renovation services to existing customers. The convenience store 7-Eleven will be a communication channel for its customers in activities such as the Perfect Friend Club.

PF shares closed on Friday on the Stock Exchange of Thailand at 3.90 baht, up 0.52%, in 1.3-million-baht trade.